The unorganized lands to the southwest of the original 13 states eventually became known as the Southwest Territory. This included the future states of Kentucky, Tennessee, Alabama, & Mississippi.
This included all of the "land south of the Ohio River." The structure of this territory was very similar to that of the Northwest Territory. However, it had a major difference: slavery was allowed.
The state of North Carolina had sent five delegates to the Constitutional Convention in Philadelphia to help write the Constitution in 1787, one of these delegates was William Blount, a land speculator who had served in the North Carolina state government.
After the Southwest Territory was formed, President Washington appointed William Blount to be its new governor.
William Blount moved from North Carolina to the Southwest Territory and he formed his capital near the Watauga Settlements in the old "State of Franklin."
Blount wanted to form a town in the area, so more settlers would want to move to the territory.
Once the government was organized, William Blount found a good location for a town 4 miles downstream from where the Holston and French Broad Rivers merge into the Tennessee River. There was a fort there known as "James White's Fort." Blount began forming a town around the fort. He named the town "Knoxville," after the first Secretary of War (and William Blount's boss) Henry Knox.
Knoxville was founded in 1786
Early 1790 southern states cede their land to federal government to have Revolutionary War debt wiped clean.
May 26, 1790 Southwest Territory officially formed.